Microsoft’s Xbox division surprised many video game enthusiasts last week when the company announced a 50% price hike, to $30 a month, for the highest level tier in its Game Pass subscription service.
Online reaction was swift, with California Gov. Gavin Newsom blaming the price increase on U.S. President Donald Trump’s tariffs, and video game retailer GameStop posting a cartoon suggesting customers would be better off just buying games in stores.
The price hike and other changes to the Game Pass plans are a sign that Xbox’s big streaming push is still not generating the revenue it would like eight years after launch, according to interviews with seven current and former Xbox employees. The company is putting some of its top titles on the streaming service, but that’s cutting into sales of higher-margin games like Call of Duty, which came with Microsoft’s 2023 acquisition of Activision Blizzard, said the people, who asked to not be identified discussing internal company matters.